Royal Mail is cutting up to 2,500 head office and support roles — less than 2% of its 131,000-strong workforce — as the former state postal monopoly tries to restructure under its new Czech billionaire owner, Daniel Křetínský. The cuts follow Křetínský's £3.6bn acquisition of parent company International Distribution Services through his EP Group and will be completed by end of 2026 through voluntary exits and natural attrition. No compulsory redundancies, no frontline reductions. The structural driver is unmistakable: UK letter volumes have collapsed more than 70% from their mid-2000s peak. A decade ago Royal Mail delivered 20 billion letters a year; that has shrunk to 6.7 billion and is projected to fall to 4 billion within four years. Meanwhile, the number of addresses Royal Mail must serve has risen by 4 million over the same period. The universal service obligation — deliver to every address, six days a week — is being squeezed from both ends. Ofcom has already begun loosening that obligation. Last July the regulator permitted the end of Saturday second-class post and reduced service to alternate weekdays. Royal Mail has not met its Ofcom-mandated first-class delivery target since 2017, or second-class since 2020. The regulator launched another investigation in June after almost a quarter of first-class mail arrived late. Fines totalling £37 million since 2023 have done nothing to change the trajectory. Consumers are paying more for worse service. First-class stamp prices rose 10p (6%) to £1.80 in April — more than doubling since 2020. Second-class stamps hit 91p. Royal Mail blames the "continued rise in the cost of delivery for every letter," which is mechanically true: fixed infrastructure costs spread across a shrinking letter base means per-unit cost spirals upward regardless of operational efficiency. The 2,500 cuts are modest relative to the 10,000 roles Royal Mail targeted in 2022, including 6,000 frontline positions. CEO Alistair Cochrane framed this round as removing "duplication" and building a "stronger, simpler" operation. The simultaneous hiring of 22,000 temporary seasonal workers for Black Friday and Christmas underscores the real business: Royal Mail is increasingly a parcels-and-peak-season logistics company wearing the uniform of a letter service. Křetínský's play is clear: strip back-office cost, lean into parcels, and manage the graceful decline of letters while extracting whatever regulatory relief Ofcom will grant. The question is who bears the cost of a universal service obligation that no longer has an economic base. Rural and elderly populations depend on physical mail disproportionately, but the cross-subsidy model that funded universal delivery is breaking down as volumes crater. The 20-year trajectory is a postal service that either abandons meaningful letter frequency commitments or requires explicit public subsidy to maintain them. Křetínský bought a logistics platform with a regulatory moat; the letter service is legacy overhead being managed toward irrelevance.
